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Investors Press US SEC for Enhanced Human Capital Disclosures    [Date Added : 08/15/2017 ]
A group of institutional investors has petitioned the US Securities and Exchange Commission (SEC) to ask corporations to make more human capital-related disclosures, considering that human capital management has a bearing on a company's financial performance and shareholder returns.

The global group of 25 investors with a US $2.8 trillion asset base, the Human Capital Management Coalition, is looking for enhanced disclosures on companies' human capital management practices, policies and performance. Currently, the US SEC only requires companies to disclose their employee headcount. Investors are left to their own resources even to figure out input on how much a company spends on its workforce annually.

In their petition to the US capital markets regulatory authority, the investors cite, among other examples, a report by the Harvard Law School Pensions and Capital Stewardship program that finds human capital management policies lead to better financial performance by companies. The report looked at 92 studies that investigated various investment metrics that investors use, such as shareholder return, return on assets and profitability.

Companies that make investments in staff training, health and safety measures, employee engagement, workforce diversity and inclusion, and staffing measures are likely to benefit from a lower employee turnover, a higher level of productivity, and higher levels of consumer satisfaction, the investors say. On the other hand, bad human capital management practices could result in risks to a company’s reputation and lead to lawsuits, impairing its stock performance.

The investors view the following broad metrics as providing input for human capital analysis:

- Employee demographics
- Stability of workforce
- Composition of workforce
- Employee skills
- Workforce culture and empowerment of employees
- Health and safety of employees
- Employee productivity
- Human rights
- Employee compensation and incentives
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